The Israel Electric Company and Palestinian Authority on Thursday reached a deal to resolve the Palestinians’ outstanding debt and halt power cuts in West Bank cities, while Israeli government officials okayed an agreement to supply water to the PA’s first planned city.

The IEC had cut power to the West Bank cities of Nablus and Jenin Wednesday over an unpaid debt of NIS 1.9 billion ($482 million) for the second time in a week.

The PA agreed to allocate NIS 300 million in tax funds collected by Israel on its behalf to the IEC to cover the last few months’ debt to the electric company, and the IEC agreed to stop power cuts to Nablus and Jenin.

The agreement was mediated by an unspecified senior Israeli official, Army Radio reported.

Prime Minister Benjamin Netanyahu on Thursday also intervened in the year-long conflict between Israel and the PA over supplying water to the newly constructedPalestinian city of Rawabi, the Prime Minister’s Office said.

Netanyahu ordered the city be connected to the water supply after accepting defense officials assessments that move should be undertaken.

Both agreements will serve to end long-standing disputes between Jerusalem and Ramallah, even as the Palestinians have angered Israel by going ahead with a drive for international recognition of their hoped-for state.

The state-owned IEC said the hour-long blackouts had served as a warning over the outstanding bills accrued by Palestinian utility companies that buy electricity from Israel and distribute it to West Bank cities and towns.

The company said that Palestinian residents affected by the power outage Wednesday afternoon received advance warning of the move.

On Monday, the electric company cut power to the same West Bank cities for a period of 45 minutes, marking the first time the company intentionally shut off electricity supply to Palestinian areas.

In a statement released by the IEC on Wednesday, the company said it was forced to intervene to reduce the massive debt. “Having issued numerous warnings and attempts to reach an agreements, the IEC’s board instructed the CEO to take action to minimize the debt,” the statement said.

The Palestinian Authority says it is strapped for cash after Israel froze the transfer of approximately half a billion shekels in tax revenues as a punitive measure against unilateral diplomatic moves by Ramallah to gain statehood recognition.

Palestinian officials have warned that if Israel does not transfer the frozen funds, the Palestinian Authority would terminate its security cooperation with Israel.

Rawabi, being built near Ramallah to house some 25,000 people, is the Palestinians first foray into modern city building. Plans for the city include high-quality housing and An urban commercial center complete with a seven-theater cinema, a swimming pool, a mall reminiscent of Jerusalem’s ritzy Mamilla, cafes and restaurants, and fashion boutiques.